I’ve just finished reading Super Crunchers by Ian Ayres. I rate the book 3 out of 5. A good book though.

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The book tag line is how anything can be predicted. It tells us about how should we complement our intuition with mathematical model.
Why? People is not so good at remembering things and we are involving emotion in making decision while computer doesn’t. Quite true.

The writer describe some of the use of Data Crunchers, or let’s just call it Mathematical Model, in real life application and compared it to the so called experts. For example, the quality of wine by mathematical model vs wine testers. The winner is mathematical model, and it tells us that the wine produced at 1990 in France is the best wine.

Okay, I’m not so into the idea that everything can be predicted. What interest me most is the idea of hyper-individualized marketing.
What is it? It is a marketing idea that every individual is treated personally. For example, I might see this Gmail ads in my Gmail, while you might see another ads in your Gmail =) why is it different?

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It might happened because we have different mail in our inbox, sent items, Gmail groups, etc. so that the Gail personalize its ads to what interests us.

Another example is Continental Airlines and Harrah Casino.
Continental Airlines keeps tracks of every negative experience for their most profitable customer in order to keep their loyalty.

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Be surprised if a beautifull flight attendant come to you, imagine that you were one of the frequent flyer of the CA, and said these words with such a soft voice: “Good morning, Sir. What would you like to drink? Coffee? Okay. Btw, we are really sorry that you experienced a delayed flight last week. The weather was soo bad so that we need to prepare more.“ Hahaha. I bet that you would be flipped .

Harrah Casino also has a individualized marketing which is called pain point. Pain point is a point where you have been losing money in game but you are still happy of playing it.
For example if your income is IDR 50 millions a month you might not get annoyed if you are losing IDR 5 millions in a casino game.
Actually, Harrah is using a sophisticated method in predicting your pain point. The variable included in their model is marital status, income, hobby, age, etc. They get that information from your ID, internet, social security number, and many others.

The pain point is used to squeeze your money out of your pocket but hey, you still feel happy about it. Hehe. When you just losing a game and come almost close to your pain point, suddenly a Customer Relationship Manager comes in and saying: “it seems that you have a bad day today, why don’t you try our best menu in our restaurant? Here is the voucher.” Don’t you feel happy being noted? Hahahah..

We will se more and more individualized marketing in the next years =)
Interesting, huh?

Just buy the book then :P

Happy Reading!

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